Explained: Recent changes in MSPs
Distilled Policy Brief
- The Cabinet Committee on Economic Affairs approved an increase in the Minimum Support Prices for Kharif crops for the 2018-19 marketing season, based on recommendations by the Commission for Agricultural Costs and Prices.
- The Commission for Agricultural Costs and Prices calculates the cost of production at three levels: A2, A2+FL, and C2, while MSPs are announced for 23 crops annually though public procurement remains limited.
- Due to regional variations in production costs, a uniform MSP can yield high profits in states like Punjab while causing losses in states like Maharashtra.
🎯 Prelims High-Yield Examination Points
Minimum Support Prices (MSPs) are recommended by the Commission for Agricultural Costs and Prices (CACP) and approved by the Cabinet Committee on Economic Affairs (CCEA) for 23 crops annually.
⚖️ Mains Analytical & Syllabus Linkages
Examine the structural limitations of MSP procurement, regional disparities in production costs, and the debate surrounding cost definitions (A2+FL vs C2) in agricultural pricing policy.
🎯 UPSC Prelims Practice Drill
With reference to the Minimum Support Prices (MSPs) and the Commission for Agricultural Costs and Prices (CACP), consider the following statements: 1. The CACP calculates the cost of production at three distinct levels: A2, A2+FL, and C2. 2. MSPs are announced for 23 crops annually, and public procurement is robust and uniformly distributed across all states for all these crops. 3. The 'C2' cost of production calculated by CACP includes the implied rent on land and interest on capital assets over and above A2+FL. Which of the statements given above are correct?
- [A] 1 and 2 only
- [B] 1 and 3 only
- [C] 2 and 3 only
- [D] 1, 2 and 3
▶ Reveal Official Answer & Analytical Explanation
Statement 1 is correct: The CACP calculates the cost of production at three levels: A2, A2+FL, and C2. Statement 2 is incorrect because while MSPs are announced for 23 crops annually, public procurement remains limited to a few crops like paddy and wheat and is concentrated in specific states, rather than being uniformly distributed. Statement 3 is correct: C2 includes the implied rent on land and interest on capital assets over and above A2+FL.
🏛️ Historical Twin PYQ Anchor (2021)
Consider the following statements regarding the "National Clean Air Programme (NCAP)": 1. It is implemented by the Ministry of Environment, Forest and Climate Change. 2. Central Pollution Control Board acts as the sole regulatory executive body.